A pre-qualification check in Singapore should be the first step in your home-search journey when buying a property. Before looking for your dream home, a pre-qualification check can help determine your budget.
By determining your loan amount eligibility and property affordability, you have a price range to work with and can better narrow down options on the market. Plus, being prequalified can make the loan approval process smoother.
If you’re trying to secure a new home loan in Singapore, here’s how being prequalified can help you.
What Is a Home Loan Pre-qualification Check?
A pre-qualification check gives you an estimate of how much you are likely to qualify for the home loan amount you want.
Unlike an In-Principle Approval (IPA), which has a validity of up to 30 days, a pre-qualification does not expire. Do note that getting prequalified for a loan is optional and not an official guarantee that a mortgage will be extended to you.
To perform a pre-qualification check, simply approach the bank from which you would like to take a mortgage. The bank will then assess your current income and existing financial commitments.
Alternatively, if you haven’t decided which bank to use or want an immediate online pre-qualification, you can use our pre-qualification tool for an instant and comprehensive home loan estimate. Best part is there are no documents needed and it’s completely free!
instant pre-qualification
Check your loan eligibility as you search for homes.
Step-by-step Process of Pre-qualification
Performing a pre-qualification check is a simple process. Here’s how it works:
- Type in the target property price and type
- Provide income information
- Declare your monthly commitments (i.e. credit card and other loan repayments)
- Insert your desired loan tenure
After these steps, our pre-qualification tool will generate a detailed report. Based on your loan eligibility, you can tell if you fall short on your target property’s price tag. Furthermore, it will recommend ways to boost your eligibility by pledging or un-pledging assets.
If you have your eyes on a particular listing, you can paste it into the Financial Breakdown section to get a full picture of how much of the property price your loan will cover, and how much you will have to pay for downpayment and stamp duty.
After receiving your estimated loan amount and tenure, you can use the Mortgage Repayment Calculator to check how much you’ll need to budget each month for paying back your mortgage. It will give you a full payment schedule during the entirety of your loan tenure.
mortgage repayment calculator
Calculate your monthly mortgage repayments based on your prequalified loan amount.
What’s the Difference Between a Pre-qualification and an IPA?
A pre-qualification is an instant, personalised assessment of your maximum loan eligibility. It is based on your input and requires no document submission. During the pre-qualification stage, the latest Monetary Authority of Singapore (MAS) regulations and the calculation methodology used by banks are employed.
As there is no impact on your credit score and no expiration, it is recommended that you use this method in the earlier part of your home-search journey when you’re still looking around.
Meanwhile, an IPA is a confirmation of your loan eligibility backed by a bank. An IPA requires the submission of payslips, CPF transaction history, HDB financial information, IRAS documents, and a bank application form to the desired bank you want to take a loan with.
An IPA can show sellers you are an eligible and serious buyer and speed up the loan application process. However, do note that applying for multiple IPAs may negatively impact your credit score. This is where getting prequalified before moving on to an IPA can be beneficial.
What Are the Next Steps After Getting Pre-qualified?
Now that you are prequalified, you can confidently shortlist properties to view. The details you provided during the pre-qualification check can be a good benchmark for when you actually apply for an IPA. When you find the right property, then move onto secure the IPA for the home loan you want.
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